Skewed Left

The Quiet Offseason in Odds

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MLB teams’ aggregated spending spree has been roughly the GDP of Belize, or the net worth of Belize, or nearly the total net worth of Passan’s former boss, if you want to go straight to the sportswriter’s handbook entry for coping with such hard-to-understand numbers.

All that player movement, too. Virtually none of the $1.543 billion in offseason dollars has gone toward retaining free agents. Outside of the Mike Napoli/Juan Uribe/Hiroki Kuroda/Brian Wilson class, few of any impact have stayed put.

Yet through all the overhaul—the week-long parade of hitters to Seattle, the return to loud offseasons in New York and Texas, and the relative quiet of the National League—things have remained virtually unchanged as far as who’s perceived as a contender and who’s not. To see this, just look at the industry that deals in perception.

Despite the record-threatening levels of player movement in free agency and one of the biggest trades in years with Prince Fielder swapped for Ian Kinsler, the oddsmakers have all but sat this one out.

This is nothing at all like last offseason, when the Blue Jays shot from 35-1 after the season to 8-1 in spring training. There’s no parallel to the Nationals and Dodgers both getting sliced last year, the former from 12-1 to 7-1 favorites and the latter from 18-1 to 9-1. And there has been no move nearly as dramatic the other way as the Yankees’ freefall from 7-1 to 20-1 longshots.

This year, $1.543 billion in spending has resulted in odds that are nearly unchanged from the Bovada release that always immediately follows the close of the previous World Series. The Dodgers are still the favorites, as one would expect, with a slightly less favorable price now. The Rangers just made a small crawl toward that position, going from 16-1 to 14-1, and even the Mariners—the darlings for a day of this offseason—climbed only to 33-1 from their initial standing at 50-1.

When converting the odds to perceived chance of winning (take 1/(1+odds) then adjust for house edge) only the Tampa Bay Rays moved even by one percentage point, which is a far cry from last year’s movement, which saw 13 teams changing by at least one percentage point and five teams by at least 2.5 percentage points.

Team

Oct. 31 odds

Current odds

Change in chance of winning

Dodgers

7/1

6.5/1

0.74%

Tigers

9

8.5

0.48%

Nationals

10

9

0.76%

Cardinals

10

10

0.08%

Red Sox

10

12

-0.96%

Yankees

16

14

0.64%

Rangers

16

14

0.64%

Angels

14

16

-0.52%

Braves

16

18

-0.41%

Reds

16

18

-0.41%

Athletics

16

18

-0.41%

Giants

18

20

-0.33%

Rays

16

25

-1.47%

Pirates

25

25

0.04%

Indians

20

28

-0.94%

Orioles

25

28

-0.26%

Jays

25

28

-0.26%

Mariners

50

33

0.75%

Diamondbacks

40

33

0.40%

Royals

33

33

0.03%

Phillies

33

33

0.03%

Padres

66

50

0.36%

Cubs

66

50

0.36%

White Sox

50

50

0.02%

Brewers

50

50

0.02%

Mets

75

66

0.14%

Rockies

66

66

0.01%

Twins

75

75

0.01%

Marlins

200

100

0.37%

Astros

250

200

0.08%

(Notes: Thanks to SB Nation for freeze-framing the odds at the outset of the offseason. Current odds are also from Bovada.lv for consistency’s sake. And small changes in percentage with no change in actual odds come from the fact that the house edge is smaller now than at the outset of the offseason, when there was presumably more uncertainty.)

Why is it that you’re getting roughly the same odds on everybody as you were before the 1.5 billion dollar shuffle? A few theories:

Not a lot of player-for-prospect trades
When the Royals and the Blue Jays shot up the board last year, it was because while they gave up a lot of value, they increased their chances to win in 2013 specifically. (That was the perception, and debatably the reality, for the Royals with the James Shields trade.)

This year’s big moves were never going to give that effect. The big trade was All-Star-for-All-Star between Texas and Detroit. The biggest player-for-prospect trade was probably Doug Fister for the Nationals’ package, and Washington was already a team that was going to get a lot of wagers from their bounce-back potential and couldn’t be placed too high.

Much of the improvement came in the American League, and even the same division
In other words, Seattle’s odds weren’t going to change dramatically when Texas and perhaps Oakland improved as well. Oakland’s odds even got longer through no fault of their own.

Sure you could have the whole division improving, and the whole division did improve. But with how much chance is involved in the playoffs, a team’s chances of winning the World Series is almost proportional to its chances of winning the division. It’s why the Dodgers, even if they haven’t been the best team, have been the favorites throughout—they have by a good margin the easiest path to the playoffs, and it’s mostly chance once they get there.

The Bovada oddsmakers actually are enticing you to bet on the AL teams now. The sums of the perceived chances of winning for the 15 AL teams went down, from 51.9 percent to 49.8 percent. So while the American League teams were the ones getting better, the fact that the Nationals, Cardinals, and Dodgers appear to be heavy favorites in their divisions is really what matters here, and nothing about that changed this offseason.

We’re not done yet
If the best MLB free agent left on the board is Nelson Cruz, it feels pretty safe to say the outlook for most teams won’t change much from the rest of the signings. There will be a nice boost with Masahiro Tanaka’s posting, though, which should also push baseball closer to its roughly $1.75 billion spending record from 2006.

If a David Price or a Matt Kemp moves, there could be a small adjustment, and by the time we get to the eve of Opening Day again, injuries may start to play a factor.

But with most of the action having taken place early and most of the free agents having packed their bags and moved on, this record offseason has surprisingly left us awfully close to where we started.

Another theory I'll throw out: The initial odds already built in who would be the expected spenders. So the Yankees couldn't be listed at the long odds that an old team coming off a tied-for-3rd/4th-place season with a negative run differential should be.

And when the spenders were indeed who the market expected, there wasn't much change.

Indeed, pre-season predictions in all sports are so much gumbo, as the Falcons, Steelers, Texans, Giants, Panthers, Bengals and Cardinals have made clear in the NFL. (I predict the Heat will be good this year...)

The better way to measure off-season move impact is not the absolute change in probability of winning but the odds ratio (or log odds ratio). The Marlins moving from 200-1 to 100-1 is equivalent to last year's Dodgers going from 18-1 to 9-1. The Mariners also made a substantial improvement while the Rays and Indians made substantial moves backwards.

Neat idea for an article, but I think these issues could possibly have more to do with gambling than baseball. Bovada, while a well known book, is probably one of the worst you could use to try to reflect any sort of efficient market because they are a losers only, recreational book, namely:

-they are very quick to strictly limit and/or ban winning bettors
-they display a set of lines that only very new bettors or uninformed bettors can actually bet. They often do things like, display an NFL team -3.5 when the consensus line is -3. If you bet the other team +3.5, you'll only be able to do that a few times until they switch you to a different line set, where you get the same -3/+3 you can get anywhere else. So the odds you see aren't available to anyone smart enough to know that +3.5 is a good bet when the market line is +3, unless he/she is very new to Bovada.

I don't see any baseball futures available right now there, but if they believe that uninformed bettors were overvaluing the Yankees last year, they may have dropped their publicly displayed odds from 20/1 to 7/1, whereas the bettors who don't make such major mistakes as betting at lousy odds may well have been seeing different odds. (And the smart winning bettors are mostly unable to bet at Bovada in the first place.) When your business model involves booking only to rubes, you don't need to be that worried about having the sharpest WS futures 10 months in advance.

So to summarize, the problem is that:
1) You don't know if Bovada is even taking action on these particular lines from anyone other than very new/uninformed bettors
2) Bovada doesn't at all reflect an efficient marketplace

The ideal thing to use would be a 2 way betting exchange, but Betfair's current 2014 WS market is largely non-existent, and Matchbook doesn't even have it listed yet. Of the 3 offshore books generally believed to be the sharpest (Pinnacle, Bookmaker, The Greek), only The Greek currently has MLB futures posted and the limit is only $300.

And that yields another possibility, that sharp bettors are almost certainly going to wait for more books to offer odds before betting. A smart bettor would likely wait until more books offer odds so he/she can bet more, rather than whack the odds available at the handful of books currently offering futures.

I believe it's too early in the betting market (in terms of number of books and betting limits) to be able to draw relevant conclusions, and I would never put any thought in "what lines Bovada is currently dealing" since they don't reflect the marketplace.